GRIFFON CORPORATION ANNOUNCES RECORD OPERATING RESULTS FOR THE FOURTH QUARTER
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AND FISCAL YEAR ENDED SEPTEMBER 30, 2004 AND INCREASE IN STOCK BUYBACK PROGRAM
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Jericho, New York, November 4, 2004 - Griffon Corporation (NYSE:GFF) today
announced record operating results for the fourth quarter and fiscal year ended
September 30, 2004. The increases in sales and earnings in the fourth quarter
were primarily attributable to the garage doors segment; improved full-year
operating results were driven by higher sales and earnings in each of the
company's business units
Net sales for the fourth quarter increased to $369,723,000, up from
$362,619,000 for the fourth quarter of fiscal 2003. Pretax income for the
quarter rose to $34,983,000 compared to $31,565,000 for last year's fourth
quarter. Net income for the current quarter was $18,925,000 compared to
$16,163,000 for the last quarter of 2003. Diluted earnings per share was $.61
for the fourth quarter of fiscal 2004 compared to $.50 in last year's fourth
quarter.
Net sales for the fiscal year ended September 30, 2004 were $1,393,809,000
compared to $1,254,650,000 for fiscal 2003. Pretax income for fiscal 2004
increased to $104,749,000 from $83,065,000 last year. Net income for fiscal 2004
was a record $53,859,000, and diluted earnings per share rose to $1.71 compared
to $1.28 in 2003.
The company's building products operations performed well throughout the
year, achieving higher sales and earnings. The fourth quarter was particularly
strong for the garage
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doors segment with sales increasing due to improved pricing, higher unit volume
and favorable product mix. Garage doors' operating profits improved
substantially in the last quarter of the year on the strength of the sales
increase, improved manufacturing efficiencies and effective expense control,
tempered by the effect of higher steel costs. Installation services' operating
results were down slightly compared to last year's fourth quarter, however, the
segment had an outstanding year reflecting gains in sales, earnings and margins.
In fiscal 2004, specialty plastic films achieved record sales and earnings.
The segment had lower sales and profits in the fourth quarter of fiscal 2004 due
to customer driven product design changes, which had the effect of reducing
revenue, and an increase in raw material (resin) prices, partly offset by
increased efficiencies. Earnings growth for fiscal 2004, driven by an increase
in sales and improved manufacturing efficiencies, was especially impressive
since specialty plastic films was addressing the product design changes,
execution of a significant capital expansion program and increasing raw material
prices.
Telephonics, the company's electronic information and communication systems
segment, had a solid fourth quarter, and finished the year with substantially
increased sales and profits. Contributing to the improved operating results were
deliveries under a homeland security contract for Ground Surveillance Radar
Systems for U.S. Air Force bases worldwide, sales in connection with an award to
develop, manufacture and deliver an advanced surveillance radar for the Canadian
Air Force's CP-140 Aurora Incremental Modernization Program and good performance
under other ongoing programs.
The company's record operating performance in fiscal 2004 generated
substantial cash flow. Cash generated from operations for the year was
$106,000,000, funding capital expenditures of $56,000,000, primarily for the
specialty plastic films segment. Also, the
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company continued its stock buyback program, using approximately $8,000,000 in
the quarter to acquire 400,000 shares of common stock. For the year, the company
acquired a total of 1.3 million shares for $28,000,000. The Board of Directors
has authorized a one million share increase in the company's stock buyback
program, bringing the current authorization to 1.9 million shares.
Griffon Corporation -
o is a leading manufacturer and marketer of residential, commercial and
industrial garage doors sold to professional installing dealers and major
home center retail chains;
o installs and services specialty building products and systems, primarily
garage doors, openers, fireplaces and cabinets, for new construction
markets through a substantial network of operations located throughout the
country;
o is an international leader in the development and production of embossed
and laminated specialty plastic films used in the baby diaper, feminine
napkin, adult incontinent, surgical and patient care markets; and
o develops and manufactures information and communication systems for
government and commercial markets worldwide.
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"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: All statements other than statements of historical fact included in
this release, including without limitation statements regarding the company's
financial position, business strategy and the plans and objectives of the
company's management for future operations, are forward-looking statements. When
used in this release, words such as "anticipate", "believe", "estimate",
"expect", "intend", and similar expressions, as they relate to the company or
its management, identify forward-looking statements. Such forward-looking
statements are based on the beliefs of the company's management, as well as
assumptions made by and information currently available to the company's
management. Actual results could differ materially from those contemplated by
the forward-looking statements as a result of certain factors, including but not
limited to, business and economic conditions, competitive factors and pricing
pressures, capacity and supply constraints. Such statements reflect the views of
the company with respect to future events and are subject to these and other
risks, uncertainties and assumptions relating to the operations, results of
operations, growth strategy and liquidity of the company. Readers are cautioned
not to place undue reliance on these forward-looking statements. The company
does not undertake to release publicly any revisions to these forward-looking
statements to reflect future events or circumstances or to reflect the
occurrence of unanticipated events.
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GRIFFON CORPORATION
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OPERATING HIGHLIGHTS
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(in thousands except for per share amounts)
For the Three Months Ended For the Twelve Months Ended
September 30, September 30,
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2004 2003 2004 2003
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Net sales:
Garage Doors $ 138,103 $ 125,794 $ 476,581 $ 428,437
Installation Services 78,055 78,718 306,992 289,409
Specialty Plastic Films 100,667 104,389 411,346 381,910
Electronic Information and Communication Systems 58,473 59,819 220,674 178,693
Intersegment eliminations (5,575) (6,101) (21,784) (23,799)
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$ 369,723 $ 362,619 $ 1,393,809 $ 1,254,650
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Operating income:
Garage Doors $ 15,738 $ 10,836 $ 42,600 $ 33,755
Installation Services 2,716 3,180 10,909 7,380
Specialty Plastic Films 13,793 14,779 52,655 44,244
Electronic Information and Communication Systems 8,288 7,698 20,224 14,161
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Segment operating income 40,535 36,493 126,388 99,540
Unallocated amounts (3,950) (3,202) (14,643) (12,290)
Interest expense, net (1,602) (1,726) (6,996) (4,185)
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Income before income taxes 34,983 31,565 104,749 83,065
Provision for income taxes (12,943) (11,995) (38,757) (29,876)(1)
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Income before minority interest 22,040 19,570 65,992 53,189
Minority interest (3,115) (3,407) (12,133) (10,167)
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Net income $ 18,925 $ 16,163 $ 53,859 $ 43,022
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Earnings per share of common stock:
Basic $ .64 $ .53 $ 1.81 $ 1.33
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Diluted $ .61 $ .50 $ 1.71 $ 1.28
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(1) Includes benefit of $1.7 million in 2003 on resolution of tax contingencies
and finalization of income taxes on foreign earnings and remittances.